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First Citizens lays off 500 employees from the SVB

MADRID, 25 May.

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First Citizens lays off 500 employees from the SVB


First Citizens Bancshares has dispensed with some 500 former employees of Silicon Valley Bank (SVB), just two months after the acquisition of the failed Californian bank, which became the first victim of the turmoil that shook the regional bank in the United States in March Joined.

According to multiple sources consulted by the information portal 'Axios', almost all the layoffs occurred in SVB's commercial banking business. The adjustment would mean a cut of less than 3% of the total workforce of First Citizens.

Likewise, according to an email sent to all employees by the CEO of First Citizens, Frank Holding, and seen by the 'BBC' chain, the executive explained that the cuts will affect "corporate functions of SVB without including personnel in positions of customer service", in addition to noting that the SVB support functions team in India "is not affected by the changes".

"Given the challenges facing SVB at the beginning of 2023, it is increasingly clear that we must make decisions to adjust our scope and scale to remain competitive," Holding says.

First Citizens Bank closed the first quarter of 2023 with an attributable net profit of 9,504 million dollars (8,660 million euros), thus boosting its profits compared to the 264 million dollars (240 million euros) recorded in the same period of 2022. .

As a result of the acquisition of SVB, completed on March 27, the entity recorded a preliminary capital gain of 9,820 million dollars (8,948 million euros), as well as a provision for losses due to the impairment of loans and credit leases of 462 million dollars (421 million euros) and a provision for unfunded commitments of 254 million dollars (231 million euros).

Thus, without taking into account the extraordinary favorable accounting impact of the acquisition of a large part of the SVB, the adjusted net profit of First Citizens Bank between January and March was 292 million dollars (266 million euros), a figure one 2.3% lower than the result of the first quarter of 2022.

First Citizens Bank completed an agreement with the Federal Deposit Insurance Corporation (FDIC) on March 27 to acquire assets of Silicon Valley Bridge Bank, the bridge entity created after the collapse of the SVB, at a discount of 16.5 billion dollars ( 15,035 million euros).